Caution with jurisdiction clauses in small print conditions

The Higher Regional Court of Hamburg has clarified that there is no effective court of jurisdiction agreement if it is contained in a one-sided order confirmation or invoice and, in addition, the agreement of a court of jurisdiction is kept in a very small font size.

In the decided case, the font of the Agreement Hamburg Courts “Hamburg is place of jurisdiction” was very small in relation to the remaining text components. Moreover, it was only contained in the footer below the signatures on the letterhead.

Although the invoice forms have been used repeatedly in the course of a permanent business relationship, but never in the course of a judicial dispute, the Court considered that no effective choice of court agreement existed.

In the specific case, a German company had sold frozen meat to Egypt. The German company went bankrupt and the insolvency administrator demanded payment of the purchase price from the foreign customer. The special feature of the case was that the complaint against the Egyptian company could not be served. It had been attempted to deliver the complaint by way of legal assistance via the consulate in Egypt, but the consulate repeatedly refused delivery for various reasons. Finally, at the applicant’s request, the Court of First Instance sought public service. Then a default judgment was delivered against the Egyptian company, which had not made itself known.

Service of court documents abroad can be problematic

Remarkably, the Higher Regional Court of Hamburg states that in such a case, parallel to public service, the other party must also be notified informally about the statement of claim or a judgment pronounced. Otherwise the public service shall be ineffective. This view is quite astonishing, as it finds no support in the text of the statutory law. In this respect, companies that have to sue other foreign contractual partners will always have to check whether they have to inform them informally about ongoing proceedings if they have used informal commuincation channels e.g. email or fax in the past.

The procedure is one way or another an apprenticeship for anyone who has to conduct international lawsuits against foreign buyers.

Should you have any questions regarding international commercial law or foreign litigation, our international lawyers will be happy to assist you.

Lawyer Dr. Tristan Wegner

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